The UK Coalition Government is committed to put in place the necessary policies to facilitate the decarbonization of the road transport sector. Despite a fiscal strategy entailing ongoing budget cuts for most government departments, in October 2010 the UK Government announced a package of around £400m to promoteultra-low emission vehicles.

In May 2011, the UK’s Department for Transport (DfT) updated its four-year Business Plan 2011–2015 that outlines the UK Government's five structural reform transport priorities which include a commitment to tackle carbon and roadway congestion. As part of this priority, DfT states that it will “support the early market for electric and other ultra-low emission vehicles”. The actions specified towards this end are to:

Develop a nationwide strategy to promote the installation of electric vehicle infrastructure, including a decision on whether to use an energy Regulated Asset Base and/or changes to planning/building regulations.

Support the Plugged-In Places pilots program to encourage the establishment of electric vehicle recharging infrastructure across the UK and inform the development of the electric vehicle infrastructure strategy.

Push for early European Union (EU) adoption of electric vehicle infrastructure standards.

Consolidate existing support mechanisms for low and ultra-low emission vehicle research and development.

Promote consumer uptake of ultra-low emission vehicles.

Plug-In Car Grant

The UK Government has created a subsidy program for consumers called the Plug-In Car Grant to enable the purchase of ultra-low carbon vehicles. Under the program, qualifying ultra-low emission cars will receive a grant of 25% toward the cost of the vehicle up to a maximum of £5,000. The subsidy has been designed to help make the “whole-life costs” of a qualifying car comparable to a conventional internal combustion engine vehicle, and it is intended to be “technology neutral” in which any car is potentially eligible regardless of fuel propulsion system, provided it has tailpipe CO2 emissions no higher than 75 g per km. Thus, it includes electric and plug-in hybrids as well as hydrogen-fueled vehicles. The Plug-In Car Grant program opened to consumers on 1 January 2011.The grant program will be reviewed at regular intervals to see if changes are necessary, with the first review scheduled for April 2012.

The Plugged-In Places (PIP) initiative has created electric car hubs through installing charging points in six key British cities or regions. PIP represents a major effort in establishing a charging infrastructure in the UK and is discussed in further detail in the Charging Infrastructure section.

Other National Measures

EVs in the UK also benefit from a range of other support at both national and local level, as summarized below.

National and local measures that support PHEVs and EVs in the United Kingdom

National Measures

Electric Vehicles

Vehicle Excise Duty (UK's Circulation tax)

Exempt (as tailpipe emissions < 100 g CO2/km)

Company Car Tax

Employees and employers exempt from income and national insurance contributions

Van Benefit Charge

Employees and employers exempt from income and national insurance contributions

Fuel Benefit Charge

Exempt (N/A)

Enhanced capital allowances

100% first-year allowance: business can relieve entire cost of an electric car or van against taxable profits in the year of acquisition

Local Measures

London congestion charge

100% discount

Parking charges

Some local authorities provide exemptions or a reduced charge for electric cars.